Renewably-Generated Electricity Continues to Rise as Coal and Nuclear Drop

Jan 15, 2010 - U.S. Energy Information Administration

Executive Summary
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Generation: Net generation in the United States dropped by 3.8 percent from October 2008 to October 2009. This was the 15th consecutive month that net generation was down compared to the same calendar month in the prior year. The Federal Reserve reported that industrial production was 7.1 percent lower than it had been in October 2008, the 16th consecutive month that same-month industrial production was lower than it had been in the previous year. The National Oceanic and Atmospheric Administration (NOAA) reported that October 2009 was the third coolest October on record. Accordingly, total population-weighted heating degree days for the contiguous United States were 17.4 percent above the average for the month of October. October 2008 had gone into into the record books as the 44th coolest since recordkeeping began in 1895.

The drop in coal-fired generation was the largest absolute fuel-specific decline from October 2008 to October 2009 as it fell by 11,592 thousand megawatthours, or 7.6 percent. Declines in Pennsylvania, Tennessee, Indiana, Alabama, and West Virginia accounted for 56.3 percent of the national decline. The October decline was the tenth consecutive month of relatively large drops in coal-fired generation from the same month in the prior year, though it was not as precipitous as the drop of 15.3 percent in March or the decline of 15.1 percent in February. Generation from natural gas-fired plants was 1.6 percent lower than it was in October 2008.

Generation from conventional hydroelectric sources was up by 29.8 percent from October 2008 to October 2009. The rise in generation from hydroelectric sources was the largest absolute fuel-specific increase from October 2008 to October 2009. According to NOAA, the U.S. recorded its wettest October in the 115-year period of record. The nationwide average precipitation of 4.15 inches was nearly double the long-term average of 2.11 inches. Generation increases in Alabama, California, and Tennessee composed 59.5 percent of the national increase in conventional hydroelectric generation.

Wind generation was up by 34.7 percent. The increased wind generation in Iowa, Texas, and Wyoming accounted for 54.2 percent of the national rise in wind generation. Nuclear generation was down 8.1 percent. Petroleum liquid-fired generation was down fractionally compared to a year ago, and its overall share of net generation continued to be quite small compared to coal, nuclear, natural gas-fired, and hydroelectric sources.

Figure 1: Net Generation by Major Energy Source: Total (All Sectors), November 2008 through October 2009

Year-to-date, total net generation was down 4.6 percent from 2008 levels. Net generation attributable to coal-fired plants was down 12.4 percent. Nuclear generation was down 0.4 percent. Generation from petroleum liquids was down 11.4 percent, while natural gas-fired generation was up by 3.9 percent year-to-date. The year-to-date wind generation total was up 29.1 percent. Wind is now the largest source of non-hydroelectric renewable electricity.

Year-to-date, coal-fired plants contributed 44.4 percent of the Nation’s electric power. Nuclear plants contributed 20.2 percent, while 23.7 percent was generated at natural gas-fired plants. Of the 1.0 percent generated by petroleum-fired plants, petroleum liquids represented 0.7 percent, with the remainder from petroleum coke. Conventional hydroelectric power provided 6.8 percent of the total, while other renewables (biomass, geothermal, solar, and wind) and other miscellaneous energy sources generated the remaining 3.6 percent of electric power (Figure 2).

Figure 2: Net Generation Shares by Energy Source: Total (All Sectors), Year-to-Date through October, 2009

Consumption of Fuels: Consumption of coal for power generation in October 2009 was down 6.6 percent compared to October 2008. For the same time period, consumption of petroleum liquids was up 0.7 percent, while petroleum coke fell 44.6 percent. Consumption of natural gas fell 1.7 percent.

Fuel Stocks, Electric Power Sector, October 2009

Total electric power sector coal stocks increased between October 2008 and October 2009 by 44.6 million tons. Stocks of bituminous coal (including coal synfuel) increased by 54.7 percent, or 34.2 million tons between October 2008 and October 2009 (from 62.5 to 96.7 million tons). Subbituminous coal stocks grew by 9.6 million tons between October 2008 and October 2009 (from 90.2 to 99.8 million tons). October 2009 was the 15th consecutive month that coal stocks were higher than the same month in the prior year.

Electric power sector liquid petroleum stocks totaled 41.7 million barrels at the end of October 2009, a decrease of 2.9 percent (1.3 million barrels) from October 2008. October 2009 stocks were 1.8 percent (0.8 million barrels) lower than at the end of September 2009.

Fuel Receipts and Costs, All Sectors, October 2009

In October 2009, the price of coal and petroleum liquids to electricity generators decreased from the previous month, while the price of natural gas increased by 25.8 percent. Receipts of all three categories of fossil fuels decreased from September to October.

The average price paid for coal in October 2009 was $2.17 per MMBtu, down 0.9 percent from the price paid in September and down 1.4 percent from the price paid in October 2008. Coal prices ordinarily remain constant but significant fluctuations do occur when there is an interruption in production (e.g., a mine strike) or in transportation (e.g., a rail strike or a frozen waterway). Receipts, however, do fluctuate. The October 2009 receipts of coal (77.9 million tons) decreased 2.3 percent when compared with September 2009 and 17.3 percent when compared with October 2008.

The average price paid for petroleum liquids decreased from $13.07 per MMBtu in September 2009 to $12.43 in October. This was a 4.9-percent decrease from September. The price also decreased 18.8 percent from October 2008. This large decrease was actually a return to more normal levels. During most of 2008, the Nation experienced remarkably high petroleum prices attributable to high world demand. Receipts of petroleum liquids in October 2009 were 2.8 million barrels, a relatively small decrease of 3.9 percent from September 2009 and a large decrease (39.9 percent) from October 2008. While prices were returning to normal, receipts were also decreasing due to lower U.S. demand for petroleum.

During 2008, the high prices of petroleum drove up the demand for natural gas, thereby driving up gas prices. However, like petroleum prices, natural gas prices are returning to normal. This is reflected in the 29.5-percent decrease from October 2008 to October 2009. In spite of this trend of decreasing gas prices, the average price paid for natural gas by electricity generators in October increased 25.8 percent from the September 2009 level of $3.80 per MMBtu. Colder weather helped increase natural gas prices, as heating demand rose with cooler-than-normal temperatures in many areas of the country. Receipts of natural gas were 643.2 million Mcf, down 18.1 percent from September 2009 and about the same as October 2008.

The overall price paid by electricity generating plants for fossil fuels was $3.01 per MMBtu in October 2009, a 7.5-percent increase from September 2009 and a 14.5-percent decrease from October 2008. Year-to-date (January through October) 2009 prices compared to the same period last year were up 8.3 percent for coal, down 41.8 percent for petroleum liquids, and down 51.9 percent for natural gas. Year-to-date 2009 receipts compared to the same period last year were down 7.7 percent for coal and 9.7 percent for petroleum liquids. Natural gas year-to-date receipts were up by 2.7 percent.

Figure 3: Electric Power Industry Fuel Costs, November 2008 through October 2009

Sales, Revenue, and Average Retail Price, October 2009

The average retail price of electricity for October 2009 was 9.81 cents per kilowatthour (kWh), 3.9 percent lower than September 2009 when the average retail price of electricity was 10.21 cents per kWh, and 2.3 percent lower than October 2008, when the price was 10.04 cents per kWh. Retail sales between October 2008 and October 2009 decreased 1.9 percent led by a 6.7-percent decline in the industrial sector and a 7.8-percent decline in the transportation sector. The average price of residential electricity for October 2009 decreased 0.15 cents per kWh to 11.76 cents per kWh from October 2008 and was down from 12.06 cents per kWh in September 2009. At 11.76 cents per kWh, the average residential price of electricity decreased by 1.3 percent from October 2008.

Sales: For October 2009, sales in the residential sector increased by 2.4 percent, while sales in the commercial and industrial sectors decreased by 2.0 and 6.7 percent, respectively, as compared to October 2008. For the month, total retail sales were 285.5 billion kWh, a decrease of 23.6 billion kWh from September 2009, and a decrease of 1.9 percent or 5.4 billion kWh from October 2008. Year-to-date 2009 sales were 2,999.8 billion kWh, a 4.4-percent decrease from the same period in 2008.

Revenue: Total retail revenues in October 2009 were $28.0 billion, reflecting a decrease in revenue of 4.2 percent from October 2008, and an 11.3-percent decrease from September 2009. For October 2009, residential sector retail revenues increased 1.2 percent from October 2008, while the commercial and industrial sector retail revenues decreased by 4.6 percent and 13.8 percent, respectively. Year-to-date 2009 revenue decreased by 2.7 percent from the same period in 2008.

Average Retail Price: For the month, average residential retail prices decreased to 11.76 cents per kWh from 12.06 cents per kWh in September 2009, and they were 1.3 percent lower than October 2008 when the price was 11.91 cents per kWh. The October 2009 average commercial retail price was 10.22 cents per kWh, a 2.7-percent decrease from October 2008 and also down 2.8 percent from September 2009. The average industrial retail price for October 2009 declined to 6.68 cents per kWh, a 7.6-percent decrease from October 2008 and down from 6.99 cents per kWh in September 2009. Year-to-date 2009 average retail prices increased to 10.02 cents per kWh, a 1.8-percent increase over the same period for 2008 (Figure 4).

Figure 4: Average Retail Price of Electricity to Ultimate Customers by End-Use Sector, Year-to-Date through October 2009 and 2008